EU asking for 'trade war' with palm oil curbs: Indonesian minister

Southeast Asia's palm oil exporters have the means to retaliate if the European Union imposes restrictions on the commodity, Indonesia's trade minister warned on Wednesday in an exclusive interview with the Nikkei Asian Review.

In a discussion that spanned everything from free trade deals to North Korea, Enggartiasto Lukita also made it clear that Indonesia has no interest in joining the Trans-Pacific Partnership unless the U.S. returns to the fold.

Lukita bristled at the European Parliament's passage of a resolution on palm oil and deforestation back in April. The idea is to reduce indiscriminate clearing of rainforests for plantations by creating a tougher, unified certification program for sustainable palm oil and palm products, while banning the use of the commodity in biofuels.

"You start a trade war, and we can do the same," the minister said during a visit to Tokyo.

Indonesian President Joko Widodo and Malaysian Prime Minister Najib Razak met in late November and revealed they are considering joint action to counter the restrictions. The two countries account for 82% of global palm oil output.

Though Lukita said a precise course of action has not been decided, he offered a few possibilities for fighting back: "We can stop buying Airbus [planes]. We can stop also buying dairy products from Europe. It will affect producers of milk, [just] as palm oil affects our farmers. We can also stop buying wines from Europe."

All these things, he suggested, can be imported from elsewhere.

As for the TPP, Indonesia sees little chance that U.S. President Donald Trump can be drawn back into the deal, and thus the country has little inclination to join anytime soon.

The TPP "is nothing without the U.S.," Lukita said.

Looking to save the deal after Trump withdrew in January, Japan and the other 10 remaining countries in early November agreed on key principles for moving forward.

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